##### Table of Contents



UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(X BOX)   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2002

OR

(BOX)   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 0-233-59




ANCHOR GLASS CONTAINER CORPORATION

(Exact name of registrant as specified in its charter)


|                                                       |  |                    
|------------------------------------------------------ |  | -------------------
|Delaware                                               |  | 59-3417812         
|                                                      
|                                                      
|                                                      
|                                                      
|                                                       |  |                    
|                                                      
|                                                      
|                                                      
|                                                      
|(State or other jurisdiction of                        |  | (I.R.S. Employer   
|                                                      
|                                                      
|                                                      
|                                                      
|incorporation or organization)                         |  | Identification No.)
|                                                      
|                                                      
|                                                      
|                                                      
|                                                       |  |                    
|                                                      
|                                                      
|                                                      
|                                                      
|One Anchor Plaza, 4343 Anchor Plaza Parkway, Tampa, FL |  | 33634-7513         
|                                                      
|                                                      
|                                                      
|                                                      
|                                                       |  |                    
|                                                      
|                                                      
|                                                      
|                                                      
|(Address of principal executive offices)               |  | (Zip Code)         

813-884-0000

(Registrants telephone number, including area code)


None

(Former name, former address and former fiscal year, if changed since last report)


Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes  (X BOX)      No  (BOX).

Number of shares outstanding of each class of common stock at April 30, 2002:
3,357,825 shares





---

TABLE OF CONTENTS



|                               |                                                                                               |                                                                    |  |  |  |  |  | 
|------------------------------ | --------------------------------------------------------------------------------------------- | ------------------------------------------------------------------ |  |  |  |  |  | 
|PART I  FINANCIAL INFORMATION
|                               | Item 1. Financial Statements                                                                 
|                               |                                                                                               | CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
|                               |                                                                                               | CONDENSED BALANCE SHEETS                                          
|                               |                                                                                               | CONDENSED STATEMENTS OF CASH FLOWS                                
|                               |                                                                                               | NOTES TO CONDENSED FINANCIAL STATEMENTS                           
|                               | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                               | Item 3. Quantitative and Qualitative Disclosures about Market Risk.                          
|PART II  OTHER INFORMATION   
|SIGNATURES                    



---



##### Table of Contents



ANCHOR GLASS CONTAINER CORPORATION

FORM 10-Q

For the Quarterly Period Ended March 31, 2002

INDEX

|                               |                                                                                               |                                                                                                                |    |          |   | 
|------------------------------ | --------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------- | -- | -------- | - | 
|                               |                                                                                               |                                                                                                                |    | Page No.
|                               |                                                                                               |                                                                                                                |    |         
|PART I  FINANCIAL INFORMATION |                                                                                               |                                                                                                                |    |         
|                              
|                              
|                              
|                              
|                               |                                                                                               |                                                                                                                |    |         
|                              
|                              
|                              
|                              
|                               | Item 1. Financial Statements:                                                                 |                                                                                                                |    |          |  
|                              
|                              
|                              
|                              
|                               |                                                                                               |                                                                                                                |    |         
|                              
|                              
|                              
|                              
|                               |                                                                                               | Condensed Statements of Operations and Comprehensive Income (Loss)-
Three Months Ended March 31, 2002 and 2001 |    |          | 3 | 
|                              
|                              
|                              
|                              
|                               |                                                                                               |                                                                                                                |    |         
|                              
|                              
|                              
|                              
|                               |                                                                                               | Condensed Balance Sheets -
March 31, 2002 and December 31, 2001                                                |    |          | 4 | 
|                              
|                              
|                              
|                              
|                               |                                                                                               |                                                                                                                |    |         
|                              
|                              
|                              
|                              
|                               |                                                                                               | Condensed Statements of Cash Flows -
Three Months Ended March 31, 2002 and 2001                                |    |          | 5 | 
|                              
|                              
|                              
|                              
|                               |                                                                                               |                                                                                                                |    |         
|                              
|                              
|                              
|                              
|                               |                                                                                               | Notes to Condensed Financial Statements                                                                        |    |          | 6 | 
|                              
|                              
|                              
|                              
|                               |                                                                                               |                                                                                                                |    |         
|                              
|                              
|                              
|                              
|                               | Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations |                                                                                                                |    | 12       |  
|                              
|                              
|                              
|                              
|                               |                                                                                               |                                                                                                                |    |         
|                              
|                              
|                              
|                              
|                               | Item 3. Quantitative and Qualitative Disclosures About
Market Risk                            |                                                                                                                |    | 19       |  
|                              
|                              
|                              
|                              
|                               |                                                                                               |                                                                                                                |    |         
|                              
|                              
|                              
|                              
|PART II  OTHER INFORMATION    |                                                                                               |                                                                                                                | 20 |         
|                              
|                              
|                              
|                              
|                               |                                                                                               |                                                                                                                |    |         
|                              
|                              
|                              
|                              
|SIGNATURES                     |                                                                                               |                                                                                                                | 22 |         

2



---



##### Table of Contents






PART I  FINANCIAL INFORMATION




Item 1. Financial Statements




ANCHOR GLASS CONTAINER CORPORATION
CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(unaudited)
(dollars in thousands, except per share data)

|                    |                                                                 |                                     |                                    |                          |         |                              |         |           |         |         |     |  
|------------------- | --------------------------------------------------------------- | ----------------------------------- | ---------------------------------- | ------------------------ | ------- | ---------------------------- | ------- | --------- | ------- | ------- | --- | -
|                    |                                                                 |                                     |                                    |                          |         | Three Months Ended March 31,
|                    |                                                                 |                                     |                                    |                          |         |                             
|                    |                                                                 |                                     |                                    |                          |         | 2002                         |         | 2001     
|                    |                                                                 |                                     |                                    |                          |         |                              |         |          
|                    |                                                                 |                                     |                                    |                          |         |                              |         |          
|                   
|                   
|                   
|                   
|Net sales           |                                                                 | $                                   | 178,382                            |                          |         | $                            | 169,370 |          
|                   
|                   
|                   
|                   
|Costs and expenses: |                                                                 |                                     |                                    |                          |         |                              |         |          
|                   
|                   
|                   
|                   
|                    |                                                                 | Cost of products sold               |                                    |                          | 164,572 |                              |         |           | 165,432 |        
|                   
|                   
|                   
|                   
|                    |                                                                 | Selling and administrative expenses |                                    |                          | 7,693   |                              |         |           | 7,157   |        
|                   
|                   
|                   
|                   
|                    |                                                                 |                                     |                                    |                          |         |                              |         |          
|                   
|                   
|                   
|                   
|                    | Income (loss) from operations                                   |                                     |                                    | 6,117                    |         |                              |         | (3,219    | )      
|                   
|                   
|                   
|                   
|                    |                                                                 |                                     |                                    |                          |         |                              |         |          
|                   
|                   
|                   
|                   
|                    | Other income, net                                               |                                     |                                    | 863                      |         |                              |         | 273       |        
|                   
|                   
|                   
|                   
|                    |                                                                 |                                     |                                    |                          |         |                              |         |          
|                   
|                   
|                   
|                   
|                    | Interest expense                                                |                                     |                                    | (7,183                   | )       |                              |         | (7,636    | )      
|                    |                                                                 |                                     |                                    |                          |         |                              |         |          
|                    | Net loss                                                        |                                     | $                                  | (203                     | )       |                              | $       | (10,582   | )      
|                    |                                                                 |                                     |                                    |                          |         |                              |         |          
|                    | Preferred stock dividends                                       |                                     | $                                  | (3,514                   | )       |                              | $       | (3,514    | )      
|                    |                                                                 |                                     |                                    |                          |         |                              |         |          
|                    | Loss applicable to common stock                                 |                                     | $                                  | (3,717                   | )       |                              | $       | (14,096   | )      
|                    |                                                                 |                                     |                                    |                          |         |                              |         |          
|                    | Basic and diluted net loss per share applicable
to common stock |                                     | $                                  | (0.71                    | )       |                              | $       | (2.68     | )      
|                    |                                                                 |                                     |                                    |                          |         |                              |         |          
|                    | Basic weighted average number of common
shares outstanding      |                                     |                                    | 5,251,356                |         |                              |         | 5,251,356 |        
|                    |                                                                 |                                     |                                    |                          |         |                              |         |          
|                    | Comprehensive income (loss):                                    |                                     |                                    |                          |         |                              |         |           |        
|                   
|                   
|                   
|                   
|                    |                                                                 |                                     | Net loss                           |                          | $       | (203                         | )       |           | $       | (10,582 | )  
|                   
|                   
|                   
|                   
|                    |                                                                 |                                     | Other
comprehensive income (loss): |                          |         |                              |         |           |         |         |    
|                   
|                   
|                   
|                   
|                    |                                                                 |                                     |                                    | Derivative income (loss) |         |                              | 531     |           |         |         | (89 | )
|                    |                                                                 |                                     |                                    |                          |         |                              |         |          
|                    | Comprehensive income (loss)                                     |                                     | $                                  | 328                      |         |                              | $       | (10,671   | )      
|                    |                                                                 |                                     |                                    |                          |         |                              |         |          



---

See Notes to Condensed Financial Statements.


3



---



##### Table of Contents






ANCHOR GLASS CONTAINER CORPORATION
CONDENSED BALANCE SHEETS
(dollars in thousands)

|                                               |                                            |                                          |                           |          |                |         |                   |          |        |         | 
|---------------------------------------------- | ------------------------------------------ | ---------------------------------------- | ------------------------- | -------- | -------------- | ------- | ----------------- | -------- | ------ | ------- | 
|                                               |                                            |                                          |                           |          | March 31, 2002 |         | December 31, 2001
|                                               |                                            |                                          |                           |          |                |         |                  
|                                               |                                            |                                          |                           |          | (unaudited)    |         |                   |          |       
|ASSETS                                         |                                            |                                          |                           |          |                |         |                   |         
|                                              
|                                              
|                                              
|                                              
|Current assets:                                |                                            |                                          |                           |          |                |         |                   |         
|                                              
|                                              
|                                              
|                                              
|                                               | Cash and cash equivalents                  |                                          | $                         | 6,307    |                |         | $                 | 6,209    |       
|                                              
|                                              
|                                              
|                                              
|                                               | Accounts receivable                        |                                          |                           | 47,704   |                |         |                   | 44,202   |       
|                                              
|                                              
|                                              
|                                              
|                                               | Inventories:                               |                                          |                           |          |                |         |                   |          |       
|                                              
|                                              
|                                              
|                                              
|                                               |                                            | Raw materials and manufacturing supplies |                           |          | 20,566         |         |                   |          | 22,171 |        
|                                              
|                                              
|                                              
|                                              
|                                               |                                            | Finished products                        |                           |          | 80,173         |         |                   |          | 83,402 |        
|                                              
|                                              
|                                              
|                                              
|                                               | Other current assets                       |                                          |                           | 8,284    |                |         |                   | 7,087    |       
|                                               |                                            |                                          |                           |          |                |         |                   |         
|                                               |                                            |                                          | Total current assets      |          |                | 163,034 |                   |          |        | 163,071 | 
|                                              
|                                              
|                                              
|                                              
|Property, plant and equipment, net             |                                            |                                          | 283,610                   |          |                |         | 272,926           |         
|                                              
|                                              
|                                              
|                                              
|Other assets                                   |                                            |                                          | 28,822                    |          |                |         | 29,366            |         
|                                              
|                                              
|                                              
|                                              
|Intangible pension asset                       |                                            |                                          | 22,559                    |          |                |         | 22,559            |         
|                                              
|                                              
|                                              
|                                              
|Strategic alliances with customers             |                                            |                                          | 3,171                     |          |                |         | 3,603             |         
|                                              
|                                              
|                                              
|                                              
|Goodwill                                       |                                            |                                          | 44,852                    |          |                |         | 44,852            |         
|                                               |                                            |                                          |                           |          |                |         |                   |         
|                                               |                                            | $                                        | 546,048                   |          |                | $       | 536,377           |         
|                                               |                                            |                                          |                           |          |                |         |                   |         
|LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT) |                                            |                                          |                           |          |                |         |                   |         
|                                              
|                                              
|                                              
|                                              
|Current liabilities:                           |                                            |                                          |                           |          |                |         |                   |         
|                                              
|                                              
|                                              
|                                              
|                                               | Revolving credit facility                  |                                          | $                         | 62,264   |                |         | $                 | 56,774   |       
|                                              
|                                              
|                                              
|                                              
|                                               | Current maturities of long-term debt       |                                          |                           | 765      |                |         |                   | 822      |       
|                                              
|                                              
|                                              
|                                              
|                                               | Long-term debt classified as current       |                                          |                           | 205,785  |                |         |                   | 206,091  |       
|                                              
|                                              
|                                              
|                                              
|                                               | Accounts payable                           |                                          |                           | 45,476   |                |         |                   | 46,671   |       
|                                              
|                                              
|                                              
|                                              
|                                               | Accrued expenses                           |                                          |                           | 27,183   |                |         |                   | 23,781   |       
|                                              
|                                              
|                                              
|                                              
|                                               | Accrued interest                           |                                          |                           | 11,139   |                |         |                   | 5,686    |       
|                                              
|                                              
|                                              
|                                              
|                                               | Accrued compensation and employee benefits |                                          |                           | 20,454   |                |         |                   | 24,581   |       
|                                               |                                            |                                          |                           |          |                |         |                   |         
|                                               |                                            |                                          | Total current liabilities |          |                | 373,066 |                   |          |        | 364,406 | 
|                                              
|                                              
|                                              
|                                              
|Long-term debt                                 |                                            |                                          | 1,466                     |          |                |         | 1,541             |         
|                                              
|                                              
|                                              
|                                              
|Long-term pension liabilities                  |                                            |                                          | 122,290                   |          |                |         | 122,541           |         
|                                              
|                                              
|                                              
|                                              
|Long-term post-retirement liabilities          |                                            |                                          | 64,076                    |          |                |         | 63,255            |         
|                                              
|                                              
|                                              
|                                              
|Other long-term liabilities                    |                                            |                                          | 26,837                    |          |                |         | 26,649            |         
|                                               |                                            |                                          |                           |          |                |         |                   |         
|                                               |                                            |                                          | 214,669                   |          |                |         | 213,986           |         
|                                              
|                                              
|                                              
|                                              
|Commitments and contingencies                  |                                            |                                          |                           |          |                |         |                   |         
|                                              
|                                              
|                                              
|                                              
|                                               |                                            |                                          |                           |          |                |         |                   |         
|                                              
|                                              
|                                              
|                                              
|Redeemable preferred stock                     |                                            |                                          | 83,425                    |          |                |         | 82,026            |         
|                                               |                                            |                                          |                           |          |                |         |                   |         
|Stockholders equity (deficit):                |                                            |                                          |                           |          |                |         |                   |         
|                                              
|                                              
|                                              
|                                              
|                                               | Preferred stock                            |                                          |                           | 34       |                |         |                   | 34       |       
|                                              
|                                              
|                                              
|                                              
|                                               | Issuable preferred stock                   |                                          |                           | 21,731   |                |         |                   | 21,731   |       
|                                              
|                                              
|                                              
|                                              
|                                               | Common stock                               |                                          |                           | 336      |                |         |                   | 336      |       
|                                              
|                                              
|                                              
|                                              
|                                               | Warrants                                   |                                          |                           | 9,446    |                |         |                   | 9,446    |       
|                                              
|                                              
|                                              
|                                              
|                                               | Capital in excess of par value             |                                          |                           | 104,520  |                |         |                   | 104,520  |       
|                                              
|                                              
|                                              
|                                              
|                                               | Accumulated deficit                        |                                          |                           | (185,711 | )              |         |                   | (184,109 | )     
|                                              
|                                              
|                                              
|                                              
|                                               | Accumulated
other comprehensive loss       |                                          |                           | (75,468  | )              |         |                   | (75,999  | )     
|                                               |                                            |                                          |                           |          |                |         |                   |         
|                                               |                                            |                                          | (125,112                  | )        |                |         | (124,041          | )       
|                                               |                                            |                                          |                           |          |                |         |                   |         
|                                               |                                            | $                                        | 546,048                   |          |                | $       | 536,377           |         
|                                               |                                            |                                          |                           |          |                |         |                   |         



---

See Notes to Condensed Financial Statements.


4



---



##### Table of Contents






ANCHOR GLASS CONTAINER CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
(unaudited)
(dollars in thousands)

|                                                  |                                                                                       |                                               |         |                              |        |      |        |         |        | 
|------------------------------------------------- | ------------------------------------------------------------------------------------- | --------------------------------------------- | ------- | ---------------------------- | ------ | ---- | ------ | ------- | ------ | 
|                                                  |                                                                                       |                                               |         | Three Months Ended March 31,
|                                                  |                                                                                       |                                               |         |                             
|                                                  |                                                                                       |                                               |         | 2002                         |        | 2001
|                                                  |                                                                                       |                                               |         |                              |        |     
|Cash flows from operating activities:             |                                                                                       |                                               |         |                              |        |      |        |        
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Net loss                                                                              |                                               | $       | (203                         | )      |      | $      | (10,582 | )     
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Adjustments to reconcile net loss to
cash provided by (used in) operating activities: |                                               |         |                              |        |      |        |         |       
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                       | Depreciation and amortization                 |         |                              | 14,922 |      |        |         | 15,623 | 
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                       | Loss on sale of property, plant and equipment |         |                              | 122    |      |        |         |       | 
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                       | Other                                         |         |                              | 568    |      |        |         |       | 
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Increase (decrease) in cash resulting from changes in
assets and liabilities          |                                               |         | 5,212                        |        |      |        | (13,320 | )     
|                                                  |                                                                                       |                                               |         |                              |        |      |        |        
|                                                  |                                                                                       |                                               | 20,621  |                              |        |      | (8,279 | )      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                       |                                               |         |                              |        |      |        |        
|                                                 
|                                                 
|                                                 
|                                                 
|Cash flows from investing activities:             |                                                                                       |                                               |         |                              |        |      |        |        
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Expenditures for property, plant and equipment                                        |                                               |         | (26,794                      | )      |      |        | (10,254 | )     
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Deposit of sale proceeds into escrow account                                          |                                               |         |                             |        |      |        | (7,795  | )     
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Withdrawal of funds from escrow account                                               |                                               |         |                             |        |      |        | 7,795   |       
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Proceeds from sale of property, plant and equipment                                   |                                               |         | 3,064                        |        |      |        | 7,795   |       
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Payments for strategic alliances with customers                                       |                                               |         | (1,266                       | )      |      |        | (870    | )     
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Other                                                                                 |                                               |         | (564                         | )      |      |        | (620    | )     
|                                                  |                                                                                       |                                               |         |                              |        |      |        |        
|                                                  |                                                                                       |                                               | (25,560 | )                            |        |      | (3,949 | )      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                       |                                               |         |                              |        |      |        |        
|                                                 
|                                                 
|                                                 
|                                                 
|Cash flows from financing activities:             |                                                                                       |                                               |         |                              |        |      |        |        
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Principal payments of long-term debt                                                  |                                               |         | (453                         | )      |      |        | (408    | )     
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Net draws on revolving credit facility                                                |                                               |         | 5,490                        |        |      |        | 11,731  |       
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Other, primarily financing fees                                                       |                                               |         |                             |        |      |        | (395    | )     
|                                                  |                                                                                       |                                               |         |                              |        |      |        |        
|                                                  |                                                                                       |                                               | 5,037   |                              |        |      | 10,928 |        
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                       |                                               |         |                              |        |      |        |        
|                                                 
|                                                 
|                                                 
|                                                 
|Cash and equivalents:                             |                                                                                       |                                               |         |                              |        |      |        |        
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Increase (decrease) in cash and cash equivalents                                      |                                               |         | 98                           |        |      |        | (1,300  | )     
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Balance, beginning of period                                                          |                                               |         | 6,209                        |        |      |        | 4,532   |       
|                                                  |                                                                                       |                                               |         |                              |        |      |        |        
|                                                  | Balance, end of period                                                                |                                               | $       | 6,307                        |        |      | $      | 3,232   |       
|                                                  |                                                                                       |                                               |         |                              |        |      |        |        
|Supplemental disclosure of cash flow information: |                                                                                       |                                               |         |                              |        |      |        |        
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Interest payments, net                                                                |                                               | $       | 1,126                        |        |      | $      | 4,065   |       
|                                                  |                                                                                       |                                               |         |                              |        |      |        |        



---

See Notes to Condensed Financial Statements.


5



---



##### Table of Contents






ANCHOR GLASS CONTAINER CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
(unaudited)
(dollars in thousands)

NOTE 1  Managements Responsibility

In the opinion of Management, the accompanying condensed financial
statements contain all adjustments (consisting of only normal recurring
adjustments) necessary to present fairly the financial position as of March 31,
2002 and the results of operations and cash flows for the three months ended
March 31, 2002 and 2001.

Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. It is suggested that these
condensed financial statements be read in conjunction with the Financial
Statements of Anchor Glass Container Corporation (the Company or Anchor)
included in the Companys Annual Report on Form 10-K for the year ended
December 31, 2001. The results of operations for the interim periods are not
necessarily indicative of the results of the full fiscal year.

NOTE 2  Organization of the Company

Anchor,
a Delaware corporation and a majority-owned subsidiary of Consumers Packaging
Inc. (Consumers), was formed in January 1997 to acquire certain assets and
assume certain liabilities of the former Anchor Glass Container Corporation
(Old Anchor), which was subsequently liquidated in a proceeding under Chapter
11 of the United States Bankruptcy Code.

On February 5, 1997, pursuant to an asset purchase agreement among
Consumers, Owens-Brockway Glass Container Inc. (together with its affiliates
O-I) and Old Anchor, the Company (the rights and obligations of Consumers
having been assigned to the Company) and O-I acquired substantially all of the
assets, and assumed certain liabilities, of Old Anchor.

Consumers currently owns approximately 59% of Anchor, indirectly on a
fully diluted basis (approximately 26.9% of the outstanding common stock at
March 31, 2002), through Consumers U.S., Inc. (Consumers U.S.), formed in
January 1997, by Consumers, as a holding company for Anchor.

Consumers
U.S. is a guarantor of the First Mortgage Notes and Anchors existing
credit facility, the guarantee being secured by the Common Stock and
Series B Preferred Stock of Anchor, held by Consumers U.S. Under the
reorganization, (see Note 3) the Common Stock and Series B Preferred
Stock will be cancelled and receive no distribution under the plan.

Prior to 2002, the Company was part of a group of glass manufacturing
companies with Consumers and GGC, L.L.C. (GGC) each of which was controlled
through G&G Investments, Inc. (G&G). G&G, directly or indirectly, continues
to hold the majority of the outstanding stock of Consumers. See Note 3.

The Company had engaged in a variety of transactions (including joint
purchasing, engineering, utilization of the Companys mold and repair shops and
management information systems) with Consumers and GGC. On October 1, 2001,
Consumers completed the sale of its Canadian glass producing assets to a
subsidiary of O-I. In February 2002, Mr. J. Ghaznavi, one of the Companys
directors, purchased GGC from Consumers. Following these events, Anchor has
separated activities related to these functions, with Consumers as of October
1, 2001, and with GGC as of February 2002, with Anchor and GGC entering into
the agreement described below. GGC is a competitor of Anchor.

In connection with a proposed settlement of litigation commenced by The
National Bank of Canada against Anchor and certain other affiliates, Anchor and
GGC entered into a services agreement, whereby Anchor will assist GGC in
certain functions, including information systems, through 2004. GGC will pay a
fee to Anchor of $1,000 for each year of the agreement, plus a percentage of
GGCs cash flows, as determined in accordance with the services agreement,
payable in three annual installments commencing on April 30, 2005. Anchor and
GGC have recently agreed in principle to revise the services agreement to delineate the
transitional nature of the services to be provided by Anchor and to reduce the
annual fee to $500 per year, subject to further reduction as GGC terminates its
use of certain services.

6



---



##### Table of Contents



NOTE 3  Proposed Plan of Reorganization and Liquidity

Anchor Reorganization

On March 15, 2002, Anchor entered into a definitive agreement with
Cerberus Capital Management L.P. (Cerberus) pursuant to which Cerberus will
invest $100,000 of new capital in Anchor ($80,000 of which will be in the form
of equity capital) and Anchor will effect a significant restructuring of its
existing debt and equity securities. The proposed plan of reorganization will
result in Anchors existing senior bank facility (the Revolving Credit
Facility) being replaced in its entirety by a new $100,000 credit facility,
Anchors 11.25% First Mortgage Notes due 2005, aggregate principal amount of
$150,000 (the First Mortgage Notes) remaining outstanding and being paid an
amount to compensate them for their waiver of certain change of control and
other provisions, Anchors 9.875% Senior Notes due 2008, aggregate principal
amount of $50,000 (the Senior Notes) being repaid in cash at 100% of their
principal amount and Anchors Series A Preferred Stock (which has a current
accrued liquidation value of approximately $83,400) receiving a cash
distribution of $22,500. Anchors Series B Preferred Stock (which has a current
accrued liquidation value of approximately $105,700) and Anchors outstanding
Common Stock will be cancelled and receive no distribution under the plan. All
of Anchors other unaffiliated creditors, including trade creditors, will be
unimpaired and paid in the ordinary course.

The plan will be effected through a pre-arranged case under Chapter 11
of the Bankruptcy Code, filed for the purpose of confirming the proposed plan
of reorganization (the Plan). See Note 7  Subsequent Event.

The closing of the transactions is subject to a number of conditions,
including the confirmation of a plan of reorganization by the United States
Bankruptcy Court, the absence of any material adverse change in the business of
Anchor, the settlement of a shareholder derivative action currently pending in
Delaware Chancery Court, receipt of any required governmental approvals and
third party consents and other closing conditions. The parties to the
derivative action have recently reached an agreement in principle pursuant to
which the derivative action will be settled on the basis of total consideration
to the Company of approximately $9,000, of which approximately $6,000 is in
cash (net of attorney fees for the plaintiffs not to exceed $2,500), and the
exchange of mutual releases by the parties. Implementation of the settlement
is subject to the execution of definitive documentation, as well as approval of
the settlement by the Bankruptcy Court and the Delaware Chancery Court and the
consummation of the Plan.

In connection with the proposed plan, Anchor did not make the interest
payment on its Senior Notes due March 15, 2002 or the interest payment on its
First Mortgage Notes due April 1, 2002, although all accrued interest on the
First Mortgage Notes will be paid upon approval by the Bankruptcy
Court. This
nonpayment of interest is a default under the indentures governing the First
Mortgage Notes and the Senior Notes (the Indentures). Interest has been
accrued through March 31, 2002 and is recorded in accrued interest on the
condensed balance sheet. See Note 7  Subsequent Event.

The primary purposes of the Plan and the reorganization are to reduce
Anchors debt service requirements and overall level of indebtedness, to obtain
additional financing in the form of the new term loan and new preferred and
common stock and to provide the Company with greater liquidity.

Under the terms of the Plan, the holders of the First Mortgage Notes will
retain their outstanding $150,000 of First Mortgage Notes, plus receive a
consent fee for a waiver of the change-of-control provisions and other
non-financial changes to the terms of the notes. The holders of the Senior
Notes would be repaid in cash at 100% of their principal amount. Anchors
Series A Preferred Stock will receive a cash distribution of $22,500 and will
be cancelled. Anchors Series B Preferred Stock and Common Stock will be
cancelled and receive no distribution under the plan. All of Anchors other
unaffiliated creditors, including trade creditors, will be unimpaired and be
paid in the ordinary course.

Under Chapter 11 proceedings, litigation and actions by creditors to
collect certain claims existing at the Petition Date are stayed, without
specific Bankruptcy Court authorization to pay such claims. The Company had
received authorization, pursuant to first day orders, to pay claims related to
wages, salaries, vacation, sick pay and trade creditor claims. As a
debtor-in-possession, the Company has the right, subject to

7



---



##### Table of Contents



Bankruptcy Court approval, and certain other limitations, to assume or reject
certain executory contracts, including unexpired leases. Any claim for damages
resulting from the rejection of an executory contract or an unexpired lease is
treated as a general unsecured claim in the Chapter 11 proceedings.

Consumers Bankruptcy

On May 23, 2001, Consumers filed for protection under the Canadian
Companies Creditors Arrangement Act (CCAA), with the Ontario Superior Court
of Justice. On August 3, 2001, Consumers and O-I announced an agreement whereby
O-I would acquire Consumers Canadian glass producing assets as well as the
stock of Consumers U.S. The Ontario Court of Justice approved the sale of
Consumers Canadian glass producing assets and stock of Consumers U.S. to O-I
on August 31, 2001, subject to any required regulatory approval. The asset sale
was completed on October 1, 2001. O-I has not received regulatory approval to
purchase the stock of Consumers U.S. from Consumers. In April 2002, Consumers
filed for an assignment in bankruptcy to provide for the liquidation of
Consumers.

Management of Anchor believes, upon the advice of its counsel, that the
Anchor restructuring discussed above or the acquisition of the stock of
Consumers U.S. by O-I will trigger a change in control as defined in the
Indentures. A change in control may also occur upon the change of ownership
of shares of stock of Consumers, Consumers International Inc. or Consumers,
U.S. or certain changes as to the composition of directors on the board of
Anchor. Upon a change in control as defined in the Indentures, Anchor would
be required to make an offer to repurchase all of the First Mortgage Notes and
the Senior Notes at 101% of the outstanding principal amount plus accrued and
unpaid interest. Anchor does not have the cash or liquidity available to make
this repurchase offer. The failure to make the offer would result in an event
of default under the Indentures that would give the noteholders the right to
accelerate the debt and is also a default under the Revolving Credit Facility
and would create an event of default under various equipment leases. The
occurrence of any of these events may be outside of the control of Anchor.
Consummation of the Plan will eliminate the change-in-control provision in
the Indentures. There can be no assurance that any of these events may not
occur or that the Anchor restructuring will be completed.

Cash Flow

The Companys principal sources of liquidity through 2002 are expected to
be funds derived from operations, borrowings under the credit facility and the
funding of the restructuring transactions. The unfunded interest payments on
the First Mortgage Notes and the Senior Notes, approximately $10,900, are
providing additional liquidity for current needs. The Companys plans to
increase liquidity include continuation of its cost reduction efforts,
continuation of its natural gas cost recovery program, as well as increased
sales from its supply agreements with major customers. While the initial
positive effects of the implementation of these plans are currently being
realized, there can be no assurance that these efforts will continue to be
successful or if successful, that they will provide sufficient liquidity to
meet the Companys needs.

Cash flows from operations depend on future operating performance which is
subject to prevailing conditions and to financial, business and other factors,
many of which are beyond the Companys control. Should the Company suffer
material adverse consequences from the issues discussed here and in Note 7,
additional measures may be required. This may include sales of assets and/or
consideration of other strategic alternatives. No assurance can be given that
the Company will have sufficient liquidity either from internally generated
sources or external borrowings to continue its operations and to meet its
obligations as they come due. The Company was not in compliance with the fixed
charge coverage ratio test under Anchors Revolving Credit Facility and certain
equipment leases. The Company will not currently seek a waiver for this event
of noncompliance. See Note 7  Subsequent Events.

The foregoing represents significant uncertainties as to the future
financial position of Anchor. As a result of these uncertainties, the Companys
outside auditors, at the time, rendered an opinion on the Companys financial
statements containing a going concern paragraph for 2001 and 2000. The failure
by the Company to obtain an unqualified opinion on its financial statements was
an event of default under the Revolving Credit Facility. The Company does not
intend to seek a waiver from its lenders in 2002 (a waiver was obtained in 2001
for the 2000 event of noncompliance) as the Revolving Credit Facility is
expected to be replaced. See Note 7  Subsequent Events.

8



---



##### Table of Contents



As a result of these matters, the Company classified its long-term debt,
including certain capital leases, as current liabilities in the balance sheet
at March 31, 2002 and December 31, 2001.

There can be no assurance that any of these events may not occur or that
the restructuring will be completed.

NOTE 4  Accounting for Derivative Instruments and Hedging Activities

Effective January 1, 2001, the Company adopted Statement of Financial
Accounting Standards No. 133  Accounting for Derivative Instruments and
Hedging Activities, as amended by SFAS 137 and SFAS 138 (SFAS 133). SFAS 133
establishes accounting and reporting standards requiring every derivative
instrument (including certain derivative instruments embedded in other
contracts) to be recorded in the balance sheet as either an asset or liability
measured at its fair value. SFAS 133 requires that changes in the derivative
fair values that are designated effective and qualify as cash flow hedges will
be deferred and recorded as a component of accumulated other comprehensive
income until the hedged transactions occur and are recognized in earnings. The
ineffective portion of a hedging derivatives change in fair value will be
immediately recognized in earnings. For derivative instruments that do not
qualify as cash flow hedges, SFAS 133 requires that changes in the derivative
fair values be recognized in earnings in the period of change.

The Company hedges certain of its estimated natural gas purchases,
typically over a maximum of six to twelve months, through the purchase of
natural gas futures and options. During the three months ended March 31, 2002,
a loss of $2,180 was recognized in cost of products sold related to these
futures. The Company had no futures outstanding at March 31, 2002.

In 2001 and the three months ended March 31, 2002, the Company entered
into put and call options for purchases of natural gas. The fair value of these
options at December 31, 2001 was $554 and is recorded in other current assets.
These options do not qualify as an effective cash flow hedge for natural gas
purchases. As a result of these contracts, the Company recognized derivative
income of $973 in the three-month period ended March 31, 2002.

NOTE 5  Pension Plan

Effective December 31, 2001, Anchor entered the Glass Companies
Multiemployer Pension Plan (the MEPP), which the Company believes, based on
opinion of counsel, meets the definition of a multiemployer plan for the
Employee Retirement Income Security Act of 1974 (ERISA) and Internal Revenue
Code (IRC) purposes. The MEPP is a plan created from the merger of the Anchor
defined benefit pension plan and the GGC defined benefit plan for hourly
employees. Entering into the MEPP allows Anchor to make monthly pension funding
contributions based upon hours worked. Under the MEPP, Anchor anticipates
annual funding requirements of approximately $12,500. If the Anchor defined
benefit plan remained a single employer defined benefit plan, Anchor would have
been required to fund approximately $140,000 through 2004, under the Retirement
Protection Act of 1994. If future events cause the MEPP to revert to a single employer
defined benefit plan as defined by ERISA and the IRC, Anchor would be liable
for the underfunding requirements noted above. The Job Creation and
Worker Assistance Act of 2002 would provide relief of funding
requirements of approximately $20,000 through a funding deferral,
under the single employer defined benefit plan rules.

In December 2001, the Anchor Board of Directors approved the merger of the
Anchor plan into the MEPP. GGC approved the merger of the Glenshaw Glass
Pension Plan into the MEPP effective December 31, 2001. The unions representing
employees at both Anchor and GGC have also approved the merger. The Company
has obtained a legal opinion that the conversion and merger will result in a
multiemployer plan, as defined in ERISA and IRC. Federal pension law does not
require approval of the MEPP by the Department of Labor (DOL) and Pension
Benefit Guarantee Corporation (PBGC). Should the DOL, PBGC or Internal
Revenue Service contest the validity of the MEPP, Anchor believes that it would
be successful in defending the MEPP against any such action. On April 30 2002,
the PBGC advised the Company that it is unable to determine whether
the MEPP meets the definition of a multiemployer plan and will seek a
determination from the appropriate office of the DOL.

9



---



##### Table of Contents



Statement of Financial Accounting Standards No. 87  Employers Accounting
for Pensions (SFAS 87), defines a multiemployer plan to be a pension plan to
which two or more unrelated employers contribute. Because Anchor and Glenshaw
are currently defined as related parties, the MEPP does not currently meet the definition
of a multiemployer plan under generally accepted accounting principles, and the
accounting followed by Anchor and the disclosures herein continue to reflect
the plan as if it were a single employer plan, despite the fact that the MEPP
has been designed to be a multiemployer plan for ERISA and IRC
purposes. Upon the consummation of the restructuring, Anchor and GGC
are not expected to be related parties.

NOTE 6  Summary of Recent Accounting Pronouncements

Effective January 1, 2002, the Company adopted Statement of Financial
Accounting Standards No. 142  Goodwill and Other Intangible Assets (SFAS
142). SFAS 142 addresses financial accounting and reporting for intangible
assets acquired individually or with a group of other assets at acquisition.
SFAS 142 also addresses financial accounting and reporting for goodwill and
other intangible assets subsequent to their acquisition. SFAS 142 provides that
goodwill and intangible assets that have indefinite useful lives will not be
amortized but rather will be tested at least annually for impairment. It also
provides that intangible assets that have finite useful lives will continue to
be amortized over their useful lives, but those lives will no longer be limited
to forty years. The Company will finalize the implementation of the provisions
of SFAS 142 in the second quarter of 2002 and at present has not determined the
impact of adopting SFAS 142.

The following table reconciles the Companys net loss the three months
ended March 31, 2001, adjusted to exclude goodwill amortization, to amounts
previously reported:

|                                                                   |  |                              |       |      |  |   |         |  
|------------------------------------------------------------------ |  | ---------------------------- | ----- | ---- |  | - | ------- | -
|                                                                   |  | Three months ended March 31,
|                                                                   |  |                             
|                                                                   |  | 2002                         |       | 2001
|                                                                   |  |                              |       |     
|                                                                   |  |                              |       |     
|Net loss, as reported                                              |  | $                            | (203  | )    |  | $ | (10,582 | )
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|Goodwill amortization                                              |  |                              |      |      |  |   | 744     |  
|                                                                   |  |                              |       |      |  |   |         |  
|Net loss, as adjusted                                              |  | $                            | (203  | )    |  | $ | (9,838  | )
|                                                                   |  |                              |       |      |  |   |         |  
|Basic and diluted net loss applicable to
common stock, as reported |  | $                            | (0.71 | )    |  | $ | (2.68   | )
|                                                                   |  |                              |       |      |  |   |         |  
|Basic and diluted net loss applicable to
common stock, as adjusted |  | $                            | (0.71 | )    |  | $ | (2.54   | )
|                                                                   |  |                              |       |      |  |   |         |  

Effective January 1, 2002, the Company adopted Statement of Financial
Accounting Standards No. 144  Accounting for the Impairment or Disposal of
Long-Lived Assets (SFAS 144), that addresses financial reporting for the
impairment or disposal of long-lived assets. SFAS 144 supersedes SFAS 121 and
the reporting provisions of Accounting Principles Board Opinion No. 30 
Reporting the Results of Operations, for the disposal of a segment of a
business. The Company has determined that the impact of adopting SFAS 144 will
not be material.

In August 2001, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 143  Accounting for Asset Retirement
Obligation (SFAS 143), that addresses the accounting for the recognition of
liabilities associated with the retirement of long-lived assets. SFAS 143 is
effective for financial statements issued for years beginning after June 15,
2002. The Company has not yet determined the impact of adopting SFAS 143.

On April 30, 2002, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 145  Rescission of FASB
Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections (SFAS 145) regarding the accounting of gains and losses from the
extinguishment of debt and to eliminate an inconsistency between the accounting
for sale-leaseback transactions and certain lease modifications that have
economic effects that are similar to sale-leaseback transactions. SFAS 145 is
effective for transactions occurring after May 15, 2002.

10



---



##### Table of Contents



NOTE 7  Subsequent Event

On April 15, 2002, Anchor filed a voluntary petition for relief under
Chapter 11 of the U.S. Bankruptcy Code for the purpose of confirming its
proposed plan of reorganization dated April 15, 2002, the Plan. The filing was
entered at the United States Bankruptcy Court for the Middle District of
Florida, Tampa Division (the Court). The filing consisted of a
pre-negotiated plan of reorganization, prompted by liquidity issues raised by
change in control provisions in Anchors debt instruments, as discussed in Note
3.

In connection with the Plan, Anchor entered into an agreement with Bank of
America, N.A. and Ableco Finance LLC, who together provided a $100,000
debtor-in-possession secured financing facility under a new loan agreement (the
DIP Facility), with Bank of America, N.A., as agent. The DIP Facility
consists of an $80,000 revolving credit facility, including a letter of credit
sub-facility, and a $20,000 term loan facility. Advances under the revolving
credit facility bear interest at a rate based upon (i) the adjusted LIBOR, as
defined, plus 3.0% or (ii) the base rate, as defined, plus 1.0%. Advances under
the term loan facility will bear interest at a rate based upon the agents
reference rate, as defined, plus 4.75%. The DIP Facility expires at the earlier
of the Plan confirmation date or April 17, 2003. Under an interim order of
the Court, advances outstanding under the DIP facility cannot exceed $15,000
($3,000 outstanding under the term loan facility and $12,000 outstanding
under the revolving credit facility). The Court has scheduled a hearing on the
final order of the DIP Facility for May 20, 2002.

The filing of the voluntary petition is a default under the Indentures and
certain equipment related leases.

Additionally, the nonpayment of interest (as part of the proposed plan of
reorganization) on the Senior Notes and the First Mortgage Notes, due March 15,
2002 and April 1, 2002, respectively, is a default under the Indentures, and
will cross-default with certain equipment related leases.

The Company classified its long-term debt, including certain capital
leases, as current liabilities in the balance sheet at March 31, 2002 and
December 31, 2001.

11



---



##### Table of Contents






Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations

Overview

Income from operations improved approximately $9.3 million in the first
quarter 2002 as compared with the first quarter of 2001. Recent developments
for new products in the ready-to-drink market have created increased demand
for glass containers, which has strengthened the fundamentals of the Company and the industry. This market dynamic has resulted in the Company
realizing price increases in recent months and improving margins through
upgrading a selective mix of business opportunities. The decline in the price
of natural gas, as compared with the comparable period of 2001, results in
margin improvement of approximately $4.0 million, net of the energy price
recovery program. The Companys plans to improve operations include
continuation of its cost reduction efforts, continuation of its natural gas
cost recovery program, sale of discontinued manufacturing facilities, as well
as increased sales from its supply agreements with major customers. See 
Information Concerning Forward-Looking Statements.

Results of Operations

Net Sales. Net sales for the first quarter of 2002 were $178.4 million
compared to $169.4 million for the first quarter of 2001, an increase of $9.0
million, or 5.3%. The improvement in the margin on net sales (approximately
$4.5 million) was principally a result of a shift in product mix, specifically
towards the ready-to-drink line, general price increases and an increase in
shipment volume (1.1%). Net sales dollars in the first quarter of 2001 were
negatively impacted by approximately $9.0 million due to a change in the way
certain packaging materials are sold to a certain customer. This change
resulted in a comparable reduction in cost of products sold in 2001.

Cost of Products Sold.The Companys cost of products sold in the first
quarter of 2002 was $164.6 million (or 92.3% of net sales), while the cost of
products sold for the first quarter of 2001 was $165.5 million (or 97.7% of net
sales). This decrease in the cost of products sold for the first quarter ended
March 31, 2002 as compared with the comparable period of 2001, both in dollars
and as a percentage of net sales, principally reflects the decline in the cost
of natural gas (the principal fuel for manufacturing glass) of approximately
$10.2 million, manufacturing efficiencies and lower inventory storage costs.
These improvements were partially offset by increases in other costs, such as,
insurance, fringe benefit costs and costs associated with downtime during the
modernization project at the Companys Elmira, NY facility. With the
implementation of SFAS 142, goodwill is not longer amortized. Goodwill
amortization expense was $744 in the three months ended March 31, 2001.

Selling and Administrative Expenses. Selling and administrative expenses
for the first three months of 2002 were approximately $7.7 million (or 4.3% of
net sales), while selling and administrative expenses in the first three months
of 2001 were $7.2 million (or 4.2% of net sales). This increase is attributable
to a reduction in the cross-charge of overhead costs to certain related
entities, partially offset by the discontinuance of the management agreement
with G&G.

Other Income (Expense), net. Other income, net for the first three months
of 2002 was $0.9 million compared to other income, net of $0.3 million for the
comparable period of 2001, primarily as a result of derivative gains related to
certain the Companys gas futures hedge program.

Interest Expense. Interest expense for the three months ended March 31,
2002 decreased approximately $0.5 million compared to the same period of 2001,
due primarily to lower interest rates and lower average outstanding borrowings
under the Revolving Credit Facility. Interest expense on the First Mortgage
Notes and the Senior Notes has been accrued through March 31, 2002 and is
recorded in accrued interest on the condensed balance sheet.

Net Income (Loss). The Company recorded a net loss in the first quarter
of 2002 of approximately $0.2 million as compared to a net loss of $10.6
million in the first quarter of 2001. This improvement in earnings results from
the lower cost of natural gas as discussed under Costs of Products Sold,
general price increases and increased sales volume.

12



---



##### Table of Contents



Significant Accounting Policies

The significant accounting policies of the Company are disclosed in Note 1
and other notes to the annual financial statements in our Form 10-K
for the fiscal year ended December 31, 2001. The preparation of
financial statements in conformity with generally accepted accounting
principles, requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from estimates. The most significant accounting estimates inherent
in the preparation of the Anchor financial statements form the bases for
reserves with respect to areas such as, post-retirement benefits and other
employee benefit programs, inventories, valuation
allowance to reduce deferred tax assets and pensions. Estimates and judgments
are based on historical experience and other factors believed to be reasonable
in the circumstances. Management continually reviews its accounting policies
for application and disclosure in the financial statements.

Liquidity and Capital Resources

Anchor Reorganization

On March 15, 2002, Anchor entered into a definitive agreement with
Cerberus pursuant to which Cerberus will invest $100.0 million of new capital
in Anchor ($80.0 million of which will be in the form of equity capital) and
Anchor will effect a significant restructuring of its existing debt and equity
securities. The proposed plan of reorganization will result in Anchors
Revolving Credit Facility being replaced in its entirety by a new $100 million
credit facility, Anchors First Mortgage Notes remaining outstanding and being
paid an amount to compensate them for their waiver of certain change of control
and other provisions, Anchors Senior Notes being repaid in cash at 100% of
their principal amount, Anchors Series A Preferred Stock (which has a current
accrued liquidation value of approximately $83.4 million) receiving a cash
distribution of $22.5 million. Anchors Series B Preferred Stock (which has a
current accrued liquidation value of approximately $105.7 million) and Anchors
outstanding Common Stock will be cancelled and receive no distribution under
the plan. All of Anchors other unaffiliated creditors, including trade
creditors, will be unimpaired and paid in the ordinary course.

The closing of the transactions is subject to a number of conditions,
including the confirmation of a plan of reorganization by the United States
Bankruptcy Court, the absence of any material adverse change in the business of
Anchor, the settlement of a shareholder derivative action currently pending in
Delaware Chancery Court, receipt of any required governmental approvals and
third party consents and other closing conditions. The parties to the
derivative action have recently reached an agreement in principle pursuant to
which the derivative action will be settled on the basis of total consideration
to the Company of approximately $9 million, of which approximately $6 million
is in cash (net of attorney fees for the plaintiffs not to exceed $2.5
million), and the exchange of mutual releases by the parties. Implementation
of the settlement is subject to the execution of definitive documentation, as
well as approval of the settlement by the Bankruptcy Court and the Delaware
Chancery Court and the consummation of the Plan.

In connection with the proposed plan, Anchor did not make the interest
payment on its Senior Notes due March 15, 2002 or the interest payment on its
First Mortgage Notes due April 1, 2002, although all accrued interest on the
First Mortgage Notes will be paid upon approval by the Court. This
nonpayment of interest is a default under the Indentures. Interest has been
accrued through March 31, 2002 and is recorded in accrued interest on the
condensed balance sheet.

Management believes that the Cerberus agreement is an important milestone
for Anchor and will allow the Company to complete the significant financial
restructuring that was necessary for Anchor. The transaction will remove a
significant amount of indebtedness from Anchors balance sheet.

The plan will be effected through a pre-arranged case under Chapter 11
of the Bankruptcy Code. On April 15, 2002 (the Petition Date), Anchor filed a
voluntary petition for relief under Chapter 11 of the

13



---



##### Table of Contents



U.S. Bankruptcy Code for the purpose of confirming its proposed plan of
reorganization dated April 15, 2002, the Plan. The filing was entered at the
United States Bankruptcy Court for the Middle District of Florida, Tampa
Division. The filing consisted of a pre-negotiated plan of reorganization,
prompted by liquidity issues raised by change in control provisions in Anchors
debt instruments, as discussed below.

The primary purposes of the Plan and the reorganization are to reduce
Anchors debt service requirements and overall level of indebtedness, to obtain
additional financing in the form of the new term loan and new preferred and
common stock and to provide the Company with greater liquidity.

Under the terms of the Plan, the holders of the First Mortgage Notes will
retain their outstanding $150.0 million of First Mortgage Notes, plus receive a
consent fee for a waiver of the change-of-control provisions and other
non-financial changes to the terms of the notes. The holders of the Senior
Notes would be repaid in cash at 100% of their principal amount. Anchors
Series A Preferred Stock will receive a cash distribution of $22.5 million and
will be cancelled. Anchors Series B Preferred Stock and Common Stock will be
cancelled and receive no distribution under the plan. All of Anchors other
unaffiliated creditors, including trade creditors, will be unimpaired and paid
in the ordinary course.

Under Chapter 11 proceedings, litigation and actions by creditors to
collect certain claims existing at the Petition Date are stayed, without
specific Bankruptcy Court authorization to pay such claims. The Company had
received authorization, pursuant to first day orders, to pay claims related to
wages, salaries, vacation, sick pay and trade creditor claims. As a
debtor-in-possession, the Company has the right, subject to Bankruptcy Court
approval, and certain other limitations, to assume or reject certain executory
contracts, including unexpired leases. Any claim for damages resulting from
the rejection of an executory contract or an unexpired lease is treated as a
general unsecured claim in the Chapter 11 proceedings.

In connection with the Plan, Anchor entered into an agreement with Bank of
America, N.A. and Ableco Finance LLC, who together provided a $100.0 million
debtor-in-possession secured financing facility under the DIP Facility, with
Bank of America, N.A., as agent. The DIP Facility consists of an $80.0 million
revolving credit facility, including a letter of credit sub-facility, and a
$20.0 million term loan facility. Advances under the revolving credit facility
bear interest at a rate based upon (i) the adjusted LIBOR, as defined, plus
3.0% or (ii) the base rate, as defined, plus 1.0%. Advances under the term loan
facility will bear interest at a rate based upon the agents reference rate, as
defined, plus 4.75%. The DIP Facility expires at the earlier of the Plan
consummation date or April 17, 2003.

Consumers Bankruptcy

On May 23, 2001, Consumers filed for protection under the Canadian CCAA,
with the Ontario Superior Court of Justice. On August 3, 2001, Consumers and
O-I announced an agreement whereby O-I would acquire Consumers Canadian glass
producing assets as well as the stock of Consumers U.S. The Ontario Court of
Justice approved the sale of Consumers Canadian glass producing assets and
stock of Consumers U.S. to O-I on August 31, 2001, subject to any required
regulatory approval. The asset sale of Consumers Canadian glass producing
assets was completed on October 1, 2001. O-I has not received regulatory
approval to purchase the stock of Consumers U.S. from Consumers. In April
2002, Consumers filed for an assignment in bankruptcy to provide for the
liquidation of Consumers.

Management of Anchor believes, upon the advice of its counsel, that the
Anchor restructuring or the acquisition of the stock of Consumers U.S. by O-I
will trigger a change in control as defined in the Indentures governing
Anchors First Mortgage Notes and its Senior Notes. A change in control may
also occur upon the change of ownership of shares of stock of Consumers,
Consumers International Inc. or Consumers, U.S. or certain changes as to the
composition of directors on the board of Anchor. Upon a change in control as
defined in the Indentures, Anchor would be required to make an offer to
repurchase all of the First Mortgage Notes and the Senior Notes at 101% of the
outstanding principal amount plus accrued and unpaid interest. Anchor does not
have the cash or liquidity available to make this repurchase offer. The failure
to make the offer would result in an event of default under the Indentures that
would give the noteholders the right to accelerate the debt and is also a
default under Anchors credit facility and would create an event of default
under various equipment leases. The occurrence of any of these events may be
outside of the control of Anchor. Consummation of the announced restructuring
will eliminate the change-

14



---



##### Table of Contents



in-control provision in the Indentures. There can be no assurance that
any of these events may not occur or that the restructuring will be completed.

Audit Opinion

As a result of these uncertainties, the Companys outside auditors, at the
time, have rendered an opinion on the Companys financial statements containing
a going concern paragraph for 2001 and 2000. The failure by the Company to
obtain an unqualified opinion on its financial statements is an event of
default under the Revolving Credit Facility. The Company does not intend to
seek a waiver from its lenders in 2002 (a waiver was obtained in 2001 for the
2000 event of noncompliance) as the Revolving Credit Facility is expected to be
replaced with the DIP Facility.

As a result of these matters, the Company classified its long-term debt as
current liabilities in the balance sheet at March 31, 2002 and December 31,
2001.

Pension Plan

Effective December 31, 2001, Anchor entered the MEPP, which the Company
believes based on opinion of counsel, meets the definition of a multiemployer
plan for ERISA and IRC purposes. The MEPP is a newly created plan from the
merger of the Anchor defined benefit pension plan and the GGC defined benefit
plan for hourly employees. Entering into the MEPP allows Anchor to make monthly
pension funding contributions based on hours worked. Under the MEPP, Anchor
anticipates annual funding requirements of approximately $12.5 million. If the
Anchor defined benefit plan remained a single employer defined benefit plan,
Anchor would have been required to fund approximately $140 million through
2004, under the Retirement Protection Act of 1994. Should future events cause the MEPP to revert
to a single employer defined benefit plan as defined by ERISA and the IRC,
Anchor would be liable for the underfunding requirements noted above.
The Job Creation and Worker Assistance Act of 2002 would provide
relief of funding requirements of approximately $20 million through a
funding deferral, under the single employer defined benefit plan
rules. See 
Information Concerning Forward-Looking Statements.

Federal pension law does not require approval of the MEPP by the
Department of Labor (DOL) and Pension Benefit Guarantee Corporation (PBGC).
Should the DOL, PBGC or Internal Revenue Service contest the validity of the
MEPP, Anchor believes that it would be successful in defending the MEPP against
any such action. On April 30, 2002, the PBGC advised the Company
that it is unable to determine whether the MEPP meets the definition
of a multiemployer plan and will seek a determination from the
appropriate office of the DOL.

Cash Flow

In the first quarter of 2002, operating activities provided $20.6 million
in cash as compared to cash used of $8.3 million in the same period of 2001.
This increase in cash provided reflects the improvement in earnings and changes
in working capital items. Accounts receivable at March 31, 2002 increased
approximately $3.5 million as compared with the 2001 year end, consistent with
the increase in net sales. Inventory levels decreased approximately $4.8
million in 2002. The Company contributed approximately $2.0 million to the
multiemployer pension plan in 2002. Cash outlays for natural gas purchases in
the quarter ended March 31, 2002 decreased approximately $10.2 million over the
2001 levels for the comparable periods.

Cash consumed in investing activities for the three months ended March 31,
2002 and 2001 were $25.5 million and $3.9 million, respectively. Capital
expenditures in 2002 were $26.8 million (of which $17.0 million related to the
modernization project at the Elmira, New York facility) compared to $10.3
million in 2001. To fund capital expenditures as provided for under the terms
of the Indentures, the Company applied, in the first quarter of 2001, cash
deposited into escrow of $7.8 million, proceeds of sale and sale-leaseback
transactions. The Company invested approximately $22.2 million in 2002 and 2001
in the Elmira modernization project. In March 2002, Anchor entered into a sale
leaseback arrangement with Anheuser-Busch. Under the arrangement, Anchor
financed approximately $3.0 million of the expansion. The lease has a term of 3
years.

Net cash of $5.0 million was provided in financing activities in the first
three months of 2002, principally reflecting borrowings under the Revolving
Credit Facility, offset by scheduled repayments of debt.

15



---



##### Table of Contents



At the Petition Date, advances outstanding under the Revolving Credit
Facility were $63.3 million and outstanding letters of credit on this facility
were $6.2 million. These amounts will remain outstanding until the final order
allows for repayment with proceeds under the DIP Facility. Under an interim
order of the Court, advances outstanding under the DIP facility cannot exceed
$15.0 million ($3.0 million outstanding under the term loan facility and $12.0
million outstanding under the revolving credit facility). The Court has
scheduled a hearing on the final order of the DIP Facility for May 20, 2002. At
May 10, 2002, combined advances outstanding under the Revolving Credit
Facility and the DIP Facility were $66.3 million, borrowing availability was
$19.4 million and total outstanding letters of credit were $6.2 million.

The Companys obligations under the DIP Facility are secured on a priority
basis by substantially all of the assets of the Company, subject to
pre-petition liens (including liens on certain collateral securing the First
Mortgage Notes).

The DIP Facility contains certain covenants that restrict the Companys
ability to take various actions, including, subject to specified exceptions,
the incurrence of additional indebtedness, the granting of additional liens,
the making of investments, the payment of dividends and other restricted
payments, mergers, acquisitions, sales of assets and other fundamental
corporate changes, capital expenditures, operating lease payments and
transactions with affiliates. The DIP Facility also contains a financial
covenant that requires the Company to maintain a minimum EBITDA.

The Company is party to certain lease agreements that contain, among other
things, certain financial and other covenants, including a fixed charge ratio
and a debt ratio. The Company was not in compliance with fixed charge ratio for
the quarter ended March 31, 2002.

The Indentures contain certain covenants that restrict the Company from
taking various actions, including, subject to specified exceptions and limits,
the incurrence of additional indebtedness, the granting of additional liens,
the making of investments, the payment of dividends and other restricted
payments, mergers, acquisitions and other fundamental corporate changes,
capital expenditures, asset sales and transactions with affiliates.

The nonpayment of interest (as part of the proposed plan of
reorganization) on the Senior Notes and the first Mortgage Notes, due March 15,
2002 and April 1, 2002, respectively, is a default under the Indentures and
cross-defaults with certain equipment related leases.

The filing of the voluntary petition is a default under the Indentures and
certain equipment related leases.

The level of the Companys indebtedness could have important consequences,
including:

     a substantial portion of the Companys cash flow from
operations must be dedicated to debt service,

     the Companys ability to obtain additional future debt
financing may be limited, and

     the level of indebtedness could limit the Companys
flexibility in reacting to changes in the industry and economic
conditions in general.

The Company expects significant expenditures in 2002, including capital
expenditures and contributions of approximately $12.5 million to the
multiemployer pension plan. Capital expenditures will approximate $60.0 million
in 2002, increased from 2001 levels primarily for the Elmira modernization
project. These improvements are substantially complete. The Company expects
that interest on the First Mortgage Notes (approximately $8.4 million unpaid at
April 1, 2002) will be paid upon approval by the Court. Total interest
expenditures for 2002 are expected to approximate $23.0 million. Peak operating
needs are in spring at which time working capital borrowings are estimated to
be $20.0 million higher than at other times of the year.

16



---



##### Table of Contents



Commitments for the principal payments required on long-term debt,
including capital leases and under operating leases are as follows:

| |                              |   |           |        |      |   |        |        |      |   |            |        |  |   |         |         |          |   |        |        | 
| | ---------------------------- | - | --------- | ------ | ---- | - | ------ | ------ | ---- | - | ---------- | ------ |  | - | ------- | ------- | -------- | - | ------ | ------ | 
| |                              |   | Remainder |        |      |   |        |        |      |   |            |        |  |   |         |         | 2006 and
| |                              |   | of 2002   |        | 2003 |   | 2004   |        | 2005 |   | thereafter
| |                              |   |           |        |      |   |        |        |      |   |           
| |                              |   |           |        |      |   |        |        |      |   |            |        |  |   |         |         |          |   |        |       
|
|
|
|
| | Long-term debt (1) (2)       |   | $         | 50,000 |      |   | $      |       |      |   | $          |       |  |   | $       | 150,000 |          |   | $      |       | 
|
|
|
|
| | Capital leases (1)           |   |           | 1,645  |      |   |        | 2,118  |      |   |            | 1,998  |  |   |         | 1,887   |          |   |        | 353    | 
|
|
|
|
| | Operating leases             |   |           | 13,590 |      |   |        | 16,240 |      |   |            | 11,180 |  |   |         | 6,110   |          |   |        | 13,420 | 
|
|
|
|
| | Series
A Preferred Stock (3) |   |           | 22,500 |      |   |        |       |      |   |            |       |  |   |         |        |          |   |        |       | 
| |                              |   |           |        |      |   |        |        |      |   |            |        |  |   |         |         |          |   |        |       
| |                              | $ | 87,735    |        |      | $ | 18,358 |        |      | $ | 13,178     |        |  | $ | 157,997 |         |          | $ | 13,773 |       
| |                              |   |           |        |      |   |        |        |      |   |            |        |  |   |         |         |          |   |        |        | 



---

|(1) |  | Long-term is classified as current on the condensed balance
sheet.                                                                                                   
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(2) |  | 2002 includes the proposed repayment of the Senior Notes ($50.0
million) under the Plan. The Senior Notes are due 2008.                                              
|   
|   
|   
|   
|(3) |  | 2002 includes the proposed
settlement of the Series A Preferred Stock ($22.5 million) under the
Plan. The Series A Preferred Stock is mandatorily redeemable in
2009.

There
are currently a number of litigation and other proceedings pending which may
consume a portion of Anchors liquidity. See Part II 
Item 1. Legal Proceedings.

Recent developments
for new products in the ready-to-drink market have
created increased demand for glass containers, which has strengthened
the fundamentals of the
Company and the industry. This market dynamic has
resulted in the Company realizing price increases in recent months and better
margins from an improved mix of business. See  Information Concerning
Forward-Looking Statements.

The Companys principal sources of liquidity through 2002 are expected to
be funds derived from operations, borrowings under the DIP Facility and the
funding of the restructuring transactions. The unfunded interest payments on
the First Mortgage Notes and the Senior Notes, approximately $10.9 million, are
providing additional liquidity for current needs. Because of the change in
control that would occur under the Indentures, the Company may not have the
ability to borrow additional funds. Substantially all of the Companys assets
have been pledged and the Company may be unable to raise needed cash. The
Companys plans to increase liquidity include continuation of its cost
reduction efforts, continuation of its natural gas cost recovery program,
increased sales from its supply agreements with major customers, sale of
certain Company assets and completing the restructuring agreement. While the
initial positive effects of the implementation of these plans are currently
being realized, there can be no assurance that these efforts will continue to
be successful or if successful, that they will provide sufficient liquidity to
meet the Companys needs. See  Information Concerning Forward-Looking
Statements.

Cash flows from operations depend on future operating performance which is
subject to prevailing conditions and to financial, business and other factors,
many of which are beyond the Companys control. Should the Company suffer
material adverse conditions from the issues discussed above, additional
measures may be required. This may include sales of assets and/or consideration
of other strategic alternatives. No assurance can be given that the Company
will have sufficient liquidity either from internally generated sources or
external borrowings to continue its operations and to meet its obligation as
they come due. If future operations result in noncompliance with the financial
covenants under the DIP Facility or various equipment leases, Anchor would seek
a waiver; however, there can be no assurance that such a waiver would be
granted.

Management believes that the plan of reorganization will allow the Company
to complete the significant financial restructuring that was necessary for
Anchor. The transaction will remove a significant amount of indebtedness from
Anchors balance sheet and provide additional liquidity for the Company. See 
Information Concerning Forward-Looking Statements.

Impact of Inflation

The impact of inflation on the costs of the Company, and the ability to
pass on cost increases in the form of increased sales prices, is dependent
upon market conditions. While the general level of inflation in the domestic
economy has been relatively low, the Company has experienced significant cost
increases in specific materials and energy and has not been fully able to pass
on inflationary cost increases to its customers for

17



---



##### Table of Contents



several years, although it did realize some price increases in 2001 and 2002,
primarily due to the abnormally high energy costs experienced in 2001.

Seasonality

Due principally to the seasonal nature of the brewing, iced tea and other
beverage industries, in which demand is stronger during the summer months, the
Companys shipment volume is typically higher in the second and third
quarters. Consequently, the Company will build inventory during the first
quarter in anticipation of seasonal demands during the second and third
quarters. Due to increased demand at the end of 2001 and beginning of 2002,
the Company is shipping more than usual and building less inventory. In
addition, the Company has historically scheduled shutdowns of its plants for
furnace rebuilds and machine repairs in the first and fourth quarters of the
year to coincide with scheduled holiday and vacation time under its labor
union contracts. These shutdowns normally adversely affect profitability
during the first and fourth quarters; however, the Company has in the past and
will continue in the future to implement alternatives to reduce downtime
during these periods in order to minimize disruption to the production process
and its negative effect on profitability.

New Accounting Standards

Effective January 1, 2001, the Company adopted Statement of Financial
Accounting Standards No. 142  Goodwill and Other Intangible Assets (SFAS
142). SFAS 142 addresses financial accounting and reporting for intangible
assets acquired individually or with a group of other assets at acquisition. SFAS 142 also addresses
financial accounting and reporting for goodwill and other intangible assets
subsequent to their acquisition. SFAS 142 provides that goodwill and intangible
assets that have indefinite useful lives will not be amortized but rather will
be tested at least annually for impairment. It also provides that intangible
assets that have finite useful lives will continue to be amortized over their
useful lives, but those lives will no longer be limited to forty years. The
Company will finalize the implementation of the provisions of SFAS 142 in the
second quarter of 2002 and at present has not determined the impact of adopting
SFAS 142.

Effective January 1, 2001, the Company adopted Statement of Financial
Accounting Standards No. 144  Accounting for the Impairment or Disposal of
Long-Lived Assets (SFAS 144), that addresses financial reporting for the
impairment or disposal of long-lived assets. SFAS 144 supersedes SFAS 121 and
the reporting provisions of Accounting Principles Board Opinion No. 30 
Reporting the Results of Operations, for the disposal of a segment of a
business. The Company has determined that the impact of adopting SFAS 144 is
not material.

In August 2001, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 143  Accounting for Asset Retirement
Obligation (SFAS 143), that addresses the accounting for the recognition of
liabilities associated with the retirement of long-lived assets. SFAS 143 is
effective for financial statements issued for years beginning after June 15,
2002. The Company has not yet determined the impact of adopting SFAS 143.

On April 30, 2002, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 145  Rescission of FASB
Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections (SFAS 145) regarding the accounting of gains and losses from the
extinguishment of debt and to eliminate an inconsistency between the accounting
for sale-leaseback transactions and certain lease modifications that have
economic effects that are similar to sale-leaseback transactions.
SFAS 145 is
effective for transactions occurring after May 15, 2002.

18



---



##### Table of Contents



Information Concerning Forward-Looking Statements

With the exception of the historical information contained in this report,
the matters described herein contain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include, without limitation, any statement that may
predict, forecast, indicate or imply future results, performance or
achievements, and may contain the words believe, anticipate, expect,
estimate, intend, project, will be, will likely continue, will
likely result, or words or phrases of similar meaning including, statements
concerning:

     the Companys liquidity and capital resources,

     the Companys debt levels and ability to obtain financing and service
debt,

     competitive pressures and trends in the glass container industry,

     prevailing interest rates,

     prices for energy, particularly natural gas,

     legal proceedings and regulatory matters, and

     general economic conditions.

Forward-looking statements involve risks and uncertainties (including, but
not limited to, economic, competitive, governmental and technological factors
outside the control of the Company) that may cause actual results to differ
materially from the forward-looking statements. These risks and uncertainties
may include the completion of the Anchor financial restructuring; the
confirmation of Plan under the Chapter 11 filing; the proposed sale of
Consumers U.S. stock to O-I; the highly competitive nature of the glass
container industry and the intense competition from makers of alternative forms
of packaging; the fluctuation in the price of natural gas; the
consequences if it were determined that the MEPP did not qualify as a
multiemployer pension plan, the Companys focus on the beer industry and its dependence on certain
key customers; the seasonal nature of brewing, iced tea and other beverage
industries; volatility in the demand of emerging new markets (e.g. the
ready-to-drink market); the Companys dependence on certain executive
officers; and changes in environmental and other government regulations. The
Company operates in a very competitive environment in which new risk factors
can emerge from time to time. It is not possible for management to predict all
such risk factors, nor can it assess the impact of all such risk factors on the
Companys business or the extent to which any factor, or a combination of
factors, may cause actual results to differ materially from those contained in
forward-looking statements. Given these risks and uncertainties, readers are
cautioned not to place undue reliance on forward-looking statements.




Item 3. Quantitative and Qualitative Disclosures about Market Risk.

The Revolving Credit Facility and the DIP Facility are subject to variable
interest rates. A change in interest rates could have an impact on results of
operations. The Companys long-term debt instruments (classified as current
liabilities at March 31, 2002) are subject to fixed interest rates and, in
addition, the amount of principal to be repaid at maturity is also fixed.
Therefore, the Company is not subject to market risk from its long-term debt
instruments. Less than 1% of the Companys sales are denominated in currencies
other than the U.S. dollar, and the Company does not believe its total exposure
to be significant. The Company may enter into put and call options for
purchases of natural gas. Accounting for these derivatives may increase
volatility in earnings.

19



---



##### Table of Contents






PART II  OTHER INFORMATION

Item 1. Legal Proceedings.

On October 13, 2000, certain stockholders of the Company, specifically
CoMac Partners, L.P., CoMac Endowment Fund, L.P., CoMac Opportunities Fund,
L.P., CoMac International, N.V., Carl Marks Strategic Investments, LP, Carl
Marks Strategic Investments II, LP, Varde Partners, L.P., Varde Fund (Cayman)
Ltd., Pequod Investments, L.P., Pequod International Ltd., Cerberus Partner
L.P. and Cerberus International Ltd. (collectively, the Plaintiffs),
commenced a shareholder derivative action against certain of the Companys
directors and certain officers and related entities in The Court of Chancery of
the State of Delaware in and for New Castle County. The parties to the
derivative action have recently reached an agreement in principle pursuant to
which the derivative action will be settled on the basis of total consideration
to the Company of approximately $9 million, of which approximately $6 million
is in cash (net of attorney fees for the plaintiffs not to exceed $2.5
million), and the exchange of mutual releases by the parties. Implementation
of the settlement is subject to the execution of definitive documentation, as
well as approval of the settlement by the Bankruptcy Court and the Delaware
Chancery Court and the closing of the Companys Reorganization.

On June 22, 2001, the stockholders of the Company identified in the
preceding paragraph of this Item 3 commenced an action against the Company in
the Court of Chancery of the State of Delaware in and for New Castle County.
The plaintiffs sought an order directing that the Company hold an annual
meeting for the election of directors and setting the time and place for the
meeting, and directing that the entire board of directors stand for election at
that meeting. On April 15, 2002, the Delaware Court of Chancery entered an
order postponing the Companys annual meeting of stockholders until August 15,
2002. Pursuant to an earlier court order, the meeting had been scheduled to be
held on April 19, 2002.

In September 2001, The National Bank of Canada, acting on its own behalf
and on behalf of PNC Bank, filed a complaint, in Allegheny Common Pleas Court,
against Anchor, GGC, Consumers U.S. and certain other affiliates. The complaint
alleges, among other things, fraudulent conveyances made by GGC to Anchor and
tortious interference with the contract relationship between the bank and GGC.
Discovery has not yet begun, and neither Anchor, nor any other defendant, has
been required to respond to the allegations. Settlement discussions have been
ongoing.

In November 2001, the Company filed an action in the Federal District
Court for the Indiana Fort Wayne Division, against certain principal owners of
a European glass manufacturer, seeking the return of amounts advanced in an
agreement to purchase a controlling interest in a European glass manufacturer.

On April 15, 2002, Anchor filed a voluntary petition for relief under
Chapter 11 of the U.S. Bankruptcy Code for the purpose of confirming the Plan.
The filing was entered at the United States Bankruptcy Court for the Middle
District of Florida, Tampa Division. The filing consisted of a pre-negotiated
plan of reorganization, prompted by liquidity issues raised by change in
control provisions in Anchors debt instruments. Under Chapter 11 proceedings,
litigation and actions by creditors to collect certain claims existing at the
Petition Date are stayed, without specific Bankruptcy Court authorization to
pay such claims. The Company had received authorization, pursuant to first day
orders, to pay claims related to wages, salaries, vacation, sick pay and trade
creditor claims. As a debtor-in-possession, the Company has the right, subject
to Bankruptcy Court approval, and certain other limitations, to assume or
reject certain executory contracts, including unexpired leases. Any claim for
damages resulting from the rejection of an executory contract or an unexpired
lease is treated as a general unsecured claim in the Chapter 11 proceedings.

In addition, the Company is, and from time to time may be, a party to
routine legal proceedings incidental to the operation of its business. The
outcome of these proceedings is not expected to have a material adverse effect
on the financial condition or operating results of the Company, based on the
Companys current understanding of the relevant facts and law.

20



---



##### Table of Contents



Item 2. Changes in Securities and Use of Proceeds.



| |  |  | None
| |  |  | ----

Item 3. Defaults Upon Senior Securities.



| |  |  | The Companys outside auditors, at the time, rendered an opinion
on the Companys financial statements which contains a going
concern paragraph for 2001 and 2000. The failure by the Company to
obtain an unqualified opinion on its financial statements is an
event of default under Revolving Credit Facility.
| |  |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | The filing of the voluntary petition for relief under Chapter 11
of the U.S. Bankruptcy Code is a default under the Indentures, the
Revolving Credit Facility and certain equipment related leases.                                                                                                               
|
| |  |  | The nonpayment of interest on the Senior Notes and the
First Mortgage Notes, due March 15, 2002 and April 1, 2002, respectively,
is a default under the Indentures, and cross-defaults with the
Revolving Credit Facility and certain equipment related leases.                                                   

Item 4. Submission of Matters to a Vote of Security Holders.



| |  |  | None
| |  |  | ----

Item 5. Other Information.



| |  |  | None
| |  |  | ----

Item 6. Exhibits and Reports on Form 8-K.



| | a. |  | Exhibits
| | -- |  | --------



| |  |  | None
| |  |  | ----
|



| | b. |  | Reports on Form 8-K
| | -- |  | -------------------



| | (i)   |  | Current Report on Form 8-K dated March 15, 2002 and
filed March 21, 2002 pursuant to Item 5, disclosing that Anchor
entered into a reorganization agreement with Cerberus and filing
as exhibits, the reorganization agreement and press release
dated March 15, 2002.                                                                                                                                                                                                                                                                                         
| | ----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (ii)  |  | Current Report on Form 8-K dated March 26, 2002 and
filed March 27, 2002 pursuant to Item 9, containing information
provided certain of Anchors bondholders regarding Anchors plan
of reorganization and outlook for Anchors business and is not
be deemed to be filed for the purpose of Section 18 of the
Securities Exchange Act of 1934 and is required to be disclosed
solely by Regulation FD.                                                                                                                                                      
|
| | (iii) |  | Current Report on Form 8-K dated April 15, 2002 and
filed April 17, 2002 pursuant to Item 5, disclosing that on
April 15, 2002, Anchor filed a voluntary petition for relief
under Chapter 11 of the U.S. Bankruptcy Code and filing as an
exhibit a press release dated April 15, 2002; and also
disclosing that on April 15, 2002, the Delaware Court of
Chancery entered an order postponing Anchors annual meeting of
stockholders until August 15, 2002. Pursuant to an earlier court
order, the meeting had been scheduled to be held on April 19,
2002.
|
| | (iv)  |  | Current Report on Form 8-K dated April 15, 2002 and
filed April 18, 2002 pursuant to Item 4, disclosing changes in
Anchors Certifying Accountant.                                                                                                                                                                                                                                                                                                                                                                                                             

21



---



##### Table of Contents






SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

|                   |  |  |                                    |                                                                                                                                                         
|------------------ |  |  | ---------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------
|                   |  |  | ANCHOR GLASS CONTAINER CORPORATION
|                  
|                  
|                  
|                  
|                   |  |  |                                    |                                                                                                                                                         
|                  
|                  
|                  
|                  
|Date: May 15, 2002 |  |  |                                    | /s/ Dale A. Buckwalter
Dale A. Buckwalter
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer and
Duly Authorized Officer)

22